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British Airways speaks out against Air Passenger Duty

Posted: 29 October 2014 | International Airport Review

With Air Passenger Duty 20 years old this week, Willie Walsh, chief executive of British Airways’ parent company IAG has spoken out against the tax…

Willie Walsh, chief executive of British Airways’ parent company IAG

Rises in Air Passenger Duty mean that a family of four flying to a destination outside Europe will soon pay £284 in tax, compared with just £40 when the levy was introduced on November 1, 1994. That seven-fold increase in Air Passenger Duty has taken place while inflation has not even doubled over the same period. Air Passenger Duty, which is the highest aviation tax imposed anywhere in the world, has also hugely outstripped other UK taxes such as petrol duty, road tax, duties on alcohol and insurance premiums over the last two decades.

Annual Treasury revenue from Air Passenger Duty is now nearly ten times as much as in the tax’s first full year. In total, air passengers in the UK have paid more than £26 billion in Air Passenger Duty since 1994. Even on short-haul flights, Air Passenger Duty has become a big proportion of the ticket price. The £26 Air Passenger Duty payable per person on a return flight within the UK is frequently at least a quarter of the total fare.

Abolition of Air Passenger Duty would provide economy boost

According to City analysts PwC, abolition of Air Passenger Duty would boost Britain’s economic growth by 0.5 per cent within a year and lead to the creation of 60,000 new jobs without reducing the Treasury’s net revenues.

Willie Walsh said: “Twenty years on, Air Passenger Duty has snowballed out of control and become a tax that works against people wanting to visit relatives and friends, go on holiday or grow their business to create jobs.

“Air Passenger Duty is way out of line with both other indirect taxes in the UK and flight taxes in other countries. Globalisation has accelerated enormously in the last 20 years. This tax helps no-one in today’s economic environment. We must call time on Air Passenger Duty.”

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